Property owners who would like to appeal their property tax assessments are faced with two choices in Florida – they can file a petition to the county value adjustment board or they can file a lawsuit in circuit court. Some attorneys contend that filing a VAB petition is a waste of time as the deck is stacked against the petitioner in those proceedings. I disagree, and think that there are pros and cons to both venues. This post will summarize the benefits of filing a VAB petition versus the benefits of going straight to circuit court.

Benefits of Filng a VAB Petition

1. Limited Discovery Available to Property Appraiser. In a circuit court action, both parties have the right to obtain documents from the other side, and to question the opposing parties under oath through written Interrogatories or in a deposition before a court reporter. In a VAB proceeding, however, the Property Appraiser is at a distinct disadvantage in that, while the Property Appraiser’s documents are public records that must be made available upon request, the property owner need not disclose any documents other than the documents they intend to use as evidence. While the Property Appraisers technically have statutory authority to obtain a subpoena for the production of taxpayer records, this mechanism is rarely used, except for very large taxpayers. On the other hand, in a lawsuit, both parties have the ability to obtain documents from each other, including documents that the property owner may not want to produce.

2. Value Disputes Heard by Appraisers. If your dispute is solely a dispute over appraisal methodology and does not involve any complex legal issues, the VAB can be a good choice of venue, as value disputes in larger counties are heard by licensed appraisers, as opposed to judges, who may have very little knowledge of appraisal theories and concepts.

3. Attorneys Not Required. Normally, corporations, LLC and other such entities must be represented by an attorney. However, in VAB proceedings, taxpayers are allowed to be represented by an unlicensed agent if they desire. Please note, however, that testimony at a VAB hearing is recorded and may be used against you in a later court case. Thus, if you think there is any chance that you might want to take the case to court, it would be advisable to be represented by counsel at your VAB hearing.

4. Lower Costs. The fee for filing a VAB petition is much lower than the cost of filing a circuit court action. Also, for those who desire legal counsel, most attorneys will handle VAB petitions on a flat fee or contingent fee basis.

Benefits of Filing a Circuit Court Action

1. Power to Subpoena Witnesses. One of the most important benefits of a circuit court action is that, in a court proceeding, your attorney can subpoena witnesses to testify on your behalf and can depose adverse witnesses prior to trial. Thus, testimony and evidence that may be unobtainable in a VAB proceeding can sometimes by compelled in a court proceeding.

2. More Preparation Time. In a VAB proceeding, the Clerk is only required to give you 25 days’ notice of the hearing and, in many smaller counties, the hearings are held very soon after the deadline for VAB petitions has expired. Thus, if you need more than a few weeks to prepare your case, VAB is probably not the best venue for you.

3. Cases Heard by Judge. If your case involves a complex legal or evidentiary issue, you may be better off taking your case to circuit court, where it will be decided by a judge. In contrast, value disputes before VABs are heard by either an appraiser or, in smaller counties, by the value adjustment board itself, which may not include anyone with a legal background.

4. Flexibility in Scheduling. One of the biggest disadvantages of the VAB process is the lack of flexibility in the scheduling of hearings. In small counties, the VAB may only have two meeting dates available for your hearing. In larger counties that hold hearings in front of special magistrates, the Clerk generally will not consult with the petitioner before scheduling the hearing and, once a hearing is scheduled, it can only be re-scheduled once, unless the petitioner shows good cause. In court cases, on the other hand, the parties’ attorneys coordinate the scheduling of hearings around the parties’ schedules and hearings may be rescheduled even without good cause.

5. Time to Present Case. Finally, if you have multiple witnesses and boxes of exhibits to present, a VAB hearing may not be a good venue, as only a limited amount of time is allocated to each petitioner.

Conclusion

As a general rule, cases involving multiple witnesses and complex legal issues should probably be filed in circuit court. However, even in those cases, there may be a benefit to filing a VAB petition if you would prefer to have your case heard by a licensed appraiser or if you are concerned about being forced to turn over confidential business documents in discovery. For simpler cases, filing a VAB petition can be an inexpensive way to challenge a property tax assessment without waiving your right to file a circuit court action if you are unsuccessful before the VAB.

With the Value Adjustment Board process winding down in most Florida counties, many taxpayers and some Property Appraisers are now contemplating whether to take the next step of filing a lawsuit in circuit court. This post will explain the deadlines and requirements for filing a circuit court action, the effect of the VAB proceeding in court cases, and the difference between a VAB and court proceeding.

Deadline to File a Circuit Court Action

The timeframe to file a circuit court action in a property tax or exemption dispute is very short and, because the deadlines are jurisdictional, failure to file an action by the statutory deadline will result in permanent dismissal of your case. Thus, anyone who is contemplating appealing a VAB decision to the circuit court is encouraged to consult with an attorney as soon as possible after receiving their VAB decision.

Pursuant to Fla. Stat. 194.171, those taxpayers who choose not to file a VAB petition must file their circuit court actions no later than 60 days after the certification of the tax roll, which generally occurs around mid-October in many counties. Taxpayers who file a VAB petition, but are unsatisfied with the outcome can file an appeal of the VAB decision to the circuit court, but those appeals must be filed within 60 days of the date that the VAB renders its decision. Pursuant to Fla. Stat. 196.151, an appeal of a VAB decision denying a homestead exemption must be filed within 15 days of the date that the VAB decision is rendered.

The question of when a VAB decision is “rendered” is a bit more complicated now that the Record of Decision forms contain two signature lines – one for the Chairman of the VAB, and another for the Clerk to sign when the decision is mailed. At least one judge has indicated that he believes the 60 day deadline begins running on the date that the VAB Chairman signs the Record of Decision, even if the decision is mailed by the Clerk on a later date. Thus, it would be wise to err on the side of filing the lawsuit within 60 days of the date the decision is signed by the VAB Chairman.

Of course, the county Property Appraisers also have the option of appealing an unfavorable VAB decision to circuit court. While that situation is less common, if a Property Appraiser chooses to go that route, they must file an action against the taxpayer prior to extension of the tax roll or, if the tax roll was extended prior to completion of the VAB hearings, within 30 days of recertification.

Payment of Amount Admitted to be Owed

Prior to filing an action in circuit court, the taxpayer is also required to pay that year’s property taxes. However, they have the option of paying their taxes in full or paying the amount that they admit in good faith to be owing. As with the deadlines discussed above, this requirement is jurisdictional and failure to pay the taxes prior to filing the lawsuit will result in dismissal of the case. In addition, it is imperative that the taxpayer continue to pay their taxes in a timely manner in future years while the lawsuit is pending, as the case may also be dismissed if any later years’ taxes become delinquent.

Effect of VAB Proceeding

Although referred to as an appeal of the VAB decision, a circuit court action in a property tax dispute is “de novo” – meaning that the parties will not be relying on the record created before the VAB, but rather will have the opportunity to present their case again, in full, before a circuit court judge. Thus, regardless of how many procedural or evidentiary errors may have been committed by the VAB or the Special Magistrate, none of that matters once the case gets to circuit court. That said, although the VAB decision is not dispositive and the parties are essentially getting a fresh start before the circuit court, it is important to note that the VAB proceedings are recorded. Thus, it is certainly possible for one party to use the other parties’ recorded VAB testimony to impeach them at trial.

Lawsuits Against the VAB

Fla. Stat. 194.036 allows the Property Appraiser to sue the VAB for violations of the law if the Department of Revenue finds probable cause that a particular county VAB has consistently and continuously violated the intent of the law or administrative rules in its decisions. Once the Department makes such a finding, the Property Appraiser has 20 days to file a lawsuit against the VAB. If the Property Appraiser prevails, they are entitled to reversal of the VAB’s decisions, as well as an injunction against further violations of the law.

The Florida statutes do not provide a mechanism for an aggrieved taxpayer to sue the VAB over violations of the law and, although some taxpayers have filed such suits anyway, I have not seen any that were successful, as the courts tend to find that the taxpayer’s remedy is to sue the Property Appraiser, as discussed above. However, the Department of Revenue’s VAB training materials indicate that written complaints alleging noncompliance with the law by the VAB, Special Magistrates, Clerk or parties should be sent to the VAB Attorney, with a copy to the Department of Revenue.

One Final Caveat . . .

Unlike a VAB hearing, where the rules of evidence are somewhat lax, litigants in circuit court are expected to abide by all of the Florida Rules of Civil Procedure and the Rules of Evidence. Moreover, the circuit courts are not bound by the various instructive materials issued by the Department of Revenue and the VABs. Rather, they are free to interpret the tax statutes as they see fit. Given the many different opinions as to how the new burden of proof and other procedural matters should be applied, it is entirely possible that the circuit courts could apply the new statutes very differently than the VABs.

The Florida statutes provide a fairly detailed procedure for the exchange of evidence between the taxpayer and the Property Appraiser. However, the statutes are a bit vague on the consequences of failing to disclose evidence in a timely manner. This post will try to address some common questions about Florida’s evidence disclosure requirements for Value Adjustment Board hearings.

Is the Property Appraiser required to share their evidence with the petitioner prior to the VAB hearing?

It depends. Pursuant to section 194.011(4), Fla. Stat., the Property Appraiser is required to disclose their evidence to the petitioner at least 7 days prior to the hearing only if the petitioner discloses their evidence (witness information and copies of documentary evidence) to the Property Appraiser at least 15 days prior to the VAB hearing and the petitioner sends the Property Appraiser a written request for disclosure of the Property Appraiser’s evidence. If the petitioner fails to disclose their evidence in a timely manner, or if the petitioner discloses their evidence but neglects to send the Property Appraiser a written request for disclosure of evidence, the Property Appraiser is under no duty to share their evidence with the petitioner. That said, the Property Appraiser’s records are, for the most part, still subject to the disclosure requirements of the Public Records Act, and thus a petitioner may still be able to make a request for specific documents.

If the Property Appraiser does disclose their evidence in a timely manner, will it be excluded from evidence?

No. If the petitioner complies with the requirements of section 194.011(4), Fla. Stat. and the Property Appraiser fails to disclose their evidence at least 7 days prior to the hearing, the hearing will be re-scheduled, but there is no indication in the statute that the Property Appraiser’s evidence would be inadmissible.

Is the petitioner required to disclose their evidence to the Property Appraiser prior to the VAB hearing?

No. If the petitioner wants to see the Property Appraiser’s evidence prior to the hearing, the petitioner must disclose their evidence at least 15 days prior to the hearing. However, according to the training materials provided by the Florida Department of Revenue to the VABs and Special Magistrates, the petitioner’s initiation of an evidence exchange with the Property Appraiser is strictly optional. If the petitioner chooses not to disclose their evidence, the evidence is not necessarily inadmissible. The only consequence provided in the statute is that the petitioner does not have a right to see the Property Appraiser’s evidence in advance.

What if the Property Appraiser sends the petitioner a request for documents? Must the petitioner respond?

Yes. Pursuant to section 194.034(1)(d), Fla. Stat. and the Higgs v. Good case, if the Property Appraiser makes a written request for information and the taxpayer fails to respond, the taxpayer will be prohibited from using that information at the VAB hearing or in court. Thus, while the taxpayer is not required to initiate an evidence exchange, failing to respond to a written request from the Property Appraiser could affect their right to introduce the requested information at a later hearing.

What transmission methods can be used for exchanging evidence?

Rule 12D-10.0044 of the Florida Administrative Code provides that the exchange of evidence can be accomplished by mail, fax, e-mail, hand delivery or any other method agreed upon by the parties. See Rule 12D-10.0044 for more information on delivery methods.

Florida Statute s. 194.034(5) provides that “for the purpose of review of a petition, the [VAB] may consider assessments among comparable properties within homogeneous areas or neighborhoods.” Conversely, the Florida Supreme Court has long held that a court may not reduce a taxpayer’s asssessment below its fair market value based on a mere showing that parcels of other taxpayers are assessed at a lesser amount. This creates a bit of a conundrum for the taxpayer, property appraiser and the VAB in trying to determine whether and to what extent evidence of the Property Appraiser’s assessment of other properties is relevant and admissible.

In Deltona v. Bailey, the Florida Supreme Court relied on the constitutional requirement that all property be assessed at its just value in holding that taxpayers’ assessments may not be reduced below just value just because other taxpayers may be assessed at a lower amount. The exception to this rule is when the taxpayer can plead and prove that it is being “singled out” and specifically discriminated against vis-a-vis the other taxpayers generally in the county. Based on the Deltona case, some VABs have refused to consider evidence of the assessment of comparable properties, despite the existence of Florida Statute s. 194.034(5). It is possible that they are correct in doing so, as any reduction based solely on the assessment of other comparable properties would likely be unconstitutional, absent evidence that the assessment of the subject property exceeded its just value.

However, another view is that the statute allows VAB petitioners to submit evidence of assessments of comparable properties in order to help prove that the Property Appraiser’s assessment was “arbitrarily based on appraisal practices which are different from the appraisal practices generally applied by the property appraiser to comparable property within the same class and within the same county,” per Florida Statute 194.301. Prior to 2009, if a taxpayer could meet this burden, their burden of proving that the assessment exceeded just value would be reduced from “clear and convincing evidence” to a “preponderance of the evidence.” Beginning in 2009, if the taxpayer meets this burden, the Property Appraiser’s assessment is overturned and the VAB must either set the value or remand to the Property Appraiser for a reassessment.

Viewed this way, evidence of the assessment of comparable properties could have limited relevance if it tended to support the taxpayer’s contention that the Property Appraiser used different appraisal practices for their property that were not used for other similar properties. However, based on Deltona v. Bailey, the VAB would still not have the authority to reduce a taxpayer’s assessment based solely on other assessments. To reduce the taxpayer’s value, the VAB would need to see evidence that the assessment exceeded just value.

Also, it is important to note that Fla. Stat. 194.034(5) only applies to VAB proceedings, not to actions in circuit court. Thus, taxpayers who take their case to court should not plan to rely on this statute.

Page 8 of the new training materials indicates that the Property Appraiser has the initial burden of coming forward with evidence that the assessment complied with section 193.011, Fla. Stat. and professionally accepted appraisal practices. They also indicate that if the Property Appraiser does not prove by a preponderance of the evidence that the assessment met those requirements, the assessment will be overturned and the VAB must either set the value or remand to the Property Appraiser for a reassessment.

This represents a dramatic change from the training materials released on September 1, 2009, which continued to place the burden of proof on the taxpayer, consistent with the statutory language that states that the party bringing the action has the burden of proof. I will be reviewing the revised training materials in more depth and will let you know if there are any additional significant changes.

In Florida, petitions to the county value adjustment board must be filed no later than 25 days after the Property Appraiser mails the Notice of Proposed Property Taxes (or TRIM notice, as it is often called). If a taxpayer misses that deadline, their VAB petition will only be considered if they can demonstrate that the late filing was due to “good cause.”

The Florida courts have not had much opportunity to consider what constitutes good cause for filing a late VAB petition. However, in one case, the appellate court held that the fact that a non-profit corporation had difficulty assembling its directors to approve the filing of the VAB petition was not such an extraordinary circumstance that would justify filing a VAB petition after the statutory deadline.

“Good cause” means the showing of extraordinary circumstances. While this is not a compete list, some examples of circumstances that may affect the taxpayer’s ability to file on time are: (a) personal, family, or business crisis or emergency or emergency at a critical time or for an extended period of time; and (b) physical or mental illness, infirmity, or disability.

When a taxpayer files an untimely VAB petition, they must attach an explanation of their reasons for filing the petition late. Those reasons are then considered by the VAB or its designee. In some counties, the question will be referred to a Special Magistrate for a hearing. If the Special Magistrate finds good cause, then a later hearing will be scheduled on petition itself. Other counties allow the attorney for the VAB to make the good cause determinations.

The Department of Revenue’s training materials also provide that the VAB should consider whether the delay will affect the performance of its function in the property tax process. Thus, a petition received a few days after the deadline is probably much more likely to be considered than a petition received months into the VAB hearing process.

The deadlines are quickly approaching for filing petitions to the Value Adjustment Boards of many Florida counties. Below are the deadlines for some of the counties within the author’s practice area:

Broward County September 18, 2009

Charlotte County September 14, 2009

Collier County September 11, 2009

Hendry County September 18, 2009

Hillsborough County September 14, 2009

Manatee County September 14, 2009

Miami-Dade County September 18, 2009

Orange County September 18, 2009

Palm Beach County September 14, 2009

Seminole County September 11, 2009

How much does it cost to file a VAB petition? The filing fee for a VAB petition is $15. Depending on the nature of the dispute, the petitioner may also want to retain an attorney and/or appraiser to assist with the process, and those fees must be negotiated directly with the attorney or appraiser.

Where are petitions filed? Petitions are filed with the Clerk of the Value Adjustment Board (the Clerk of Court also serves as clerk of the value adjustment board).